War boom fading? Russia minister sounds alarm over possible recession
Russia's wartime economy, long propped up by surging defence spending, may finally be hitting a wall. In a rare public admission, Economy Minister Maxim Reshetnikov warned Thursday that the country is 'on the brink of going into a recession,' citing business pessimism and cooling indicators despite continued government efforts to project economic resilience.
'The numbers indicate cooling, but all our numbers are (like) a rearview mirror,' Reshetnikov said, according to Russian business outlet RBC. 'Judging by the way businesses currently feel and the indicators, we are already, it seems to me, on the brink of going into a recession.'
Reshetnikov was speaking at the St. Petersburg International Economic Forum, a high-profile event designed to showcase the country's economic strength and attract global investment.
Despite massive Western sanctions following the invasion of Ukraine in February 2022, Russia's economy has outperformed some expectations, buoyed by high defence spending that has driven growth and kept unemployment low. Wage increases meant to keep up with rising inflation have left some Russian workers in a better financial position, particularly in poorer regions where military enlistment bonuses and death benefits have flowed.
Still, many economists warn that the economy's militarised momentum may not be sustainable. Inflation remains a key challenge, and a severe decline in foreign investment continues to weigh on long-term prospects. Analysts say a lack of investment outside the defence sector is likely to lead to economic stagnation.
'Going forward, it all depends on our decisions,' Reshetnikov said, suggesting the country's near-term economic fate rests on government policy.
Other top officials painted a less dire picture. Finance Minister Anton Siluanov acknowledged a cooling economy but added, 'After any cooling, the summer always comes,' RBC reported.
Central Bank Governor Elvira Nabiullina echoed that sentiment, saying the Russian economy was simply 'coming out of overheating.'
(With Inputs from Associated Press)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
6 hours ago
- Time of India
Why Chinese hackers have unleashed cyberattacks on 'friend Russia' since Ukraine conflict, what 'war secrets' are behind these attacks
AI Image Cyber analysts have reportedly discovered a strange cyberwarfare trend. According to a report by New York Times, quoting security researchers, since the beginning of the war in Ukraine, groups linked to the Chinese government have repeatedly hacked Russian companies and government agencies in an apparent search for military secrets. There has been increase in Since Russia's invasion of Ukraine in February 2022, Chinese government-linked hackers have repeatedly targeted Russian companies and government agencies, seeking military secrets, according to the New York Times report. The cyberattacks, which intensified in May 2022, have persisted despite public declarations of a 'no-limits' partnership between Russian President Vladimir Putin and Chinese President Xi Jinping. Chinese hacking groups 'targetting' Russian businesses The report claims that a Chinese hacking group, Sanyo, impersonated a Russian engineering firm's email addresses in 2023 to steal data on nuclear submarines, as uncovered by Taiwan-based cybersecurity firm TeamT5, which linked the attack to Beijing. 'China likely seeks to gather intelligence on Russia's activities, including on its military operation in Ukraine, defense developments and other geopolitical maneuvers,' TeamT5 researcher Che Chang told the Times. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo A classified Russian FSB document, obtained by The New York Times, reveals Moscow's concerns about China's pursuit of Russian defense technology and battlefield insights, labeling China an 'enemy.' This contrasts with the public Sino-Russian alliance, as Russia relies on China for oil markets and war-critical technology. The document highlights China's interest in drone warfare and software, noting that 'the war in Ukraine fundamentally shifted intelligence priorities for both countries,' according to Itay Cohen of Palo Alto Networks, as quoted by the Times. What techniques Chinese hackers are said to be using against Russia The New York Times also reports that Chinese hackers targeted Rostec, Russia's state-owned defense conglomerate, for satellite communications and radar data, using malicious Microsoft Word files to infiltrate aviation and state entities. Groups like Mustang Panda, suspected of ties to China's Ministry of State Security, have hit Russian military and border units, the Times notes, citing Rafe Pilling of Sophos. Pilling told the Times, 'The targeting we've observed tends to be political and military intelligence gathering.' Proprietary malware like Deed RAT, used by Chinese state-sponsored hackers, has been deployed against Russian aerospace and defense sectors, the report said, citing Positive Technologies. Despite 2009 and 2015 agreements barring mutual cyberattacks, the Times notes that experts view these as symbolic, with hacking spiking post-Ukraine invasion. 'The activity — we saw it immediately in the months following Russia's full-scale invasion,' Cohen told the Times, highlighting the tension beneath the public narrative of Sino-Russian unity. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Hindustan Times
8 hours ago
- Hindustan Times
Zelensky urges Western allies to allot 0.25% GDP for Ukraine's defense industry
Ukrainian President Volodymyr Zelensky called on Ukraine's Western partners to allocate 0.25% of their GDP towards helping Kyiv ramp up weapons production, reported Reuters. Ukraine is in immediate need of improved weaponry and better ammunition.(REUTERS) "Ukraine is part of Europe's security and we want 0.25% of the GDP of a particular partner country to be allocated for our defence industry and domestic production," Zelensky said. "We have launched a program 'Build with Ukraine' and in summer we will sign relevant agreements to start exporting our technologies abroad in the format of opening production lines in European countries," Zelensky said. This year Kyiv had secured $43 billion to finance its domestic weapon production, he added. As Russia is bigger and more equipped than Ukraine, and the strife between the two has been escalating in the past few weeks, Zelensky's country is in immediate need of improved weaponry and better ammunition. Kyiv plans to launch joint weapon production outside of the country and will start exporting some of its military production technologies, the President affirmed. In the remarks released for publication by his office on Saturday, Zelenskiy said Ukraine was in talks with Denmark, Norway, Germany, Canada, the United Kingdom, and Lithuania to launch joint weapon production. According to the report, Ukraine's 40% defence needs are presently covered with domestic production, and the government is on the lookout for ways to boost this production in the future. Zelensky attended the G7 summit in Canada last week. He especially wanted to meet US President Donald Trump to discuss the ongoing conflict between Russia and Ukraine, help impose stronger sanctions against Russia and urge increased military support for his country. This effort went in vain as Trump left the summit a day early to address the Israel-Iran conflict in Washington. The Ukrainian President is likely to attend the upcoming NATO summit, where he will be meeting several Western leaders. He would also make a second attempt to meet Donald Trump after the G7. With inputs from agencies
Time of India
9 hours ago
- Time of India
BRICS summit in Rio: Bloc may push trade in local currencies, countries differ on common currency; India says discussions still at 'early stage'
Ahead of the July 6–7 BRICS summit in Rio de Janeiro, senior diplomats from leading member nations said the grouping is likely to intensify efforts toward settling trade in national currencies, even as they ruled out any imminent move toward a unified BRICS currency. At a conference co-hosted by the Embassy of Brazil and Centre for Global India Insights (CGII) on Friday, Russian Ambassador Denis Alipov described BRICS as 'a serious platform for discussing joint solutions to big challenges,' while reaffirming Moscow's support for trade in local currencies. 'BRICS is not a counter-bloc. It is a centre of gravity for countries seeking mutual respect and non-interference,' said Alipov, rejecting suggestions that the group was being shaped as an anti-West coalition, reported PTI. He noted that trade in national currencies was already underway between BRICS members. India's BRICS Sherpa and Secretary (Economic Relations) in the Ministry of External Affairs, Dammu Ravi, said discussions around a BRICS common currency are 'at a very early stage.' 'Today, for now, we are only looking at trade settlement in national currencies. Harmonisation of fiscal and monetary policies is very, very difficult to achieve,' he said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Brass Krishna Idols For Prosperity & Protection In Life Luxeartisanship Shop Now Undo Brazilian Ambassador Kenneth da Nobrega echoed the sentiment, adding that while deeper integration like a common currency requires years of policy alignment, local currency trade was already showing results. 'It's a long way. But trading in local currencies? That's already working,' Nobrega said. The summit comes amid geopolitical unease following warnings by President Donald Trump against any formal move by BRICS nations to undermine the US dollar's dominance in global trade. The Trump administration's tariffs have already drawn concern among developing economies. The summit is set to be attended by Prime Minister Narendra Modi, Chinese President Xi Jinping, South African President Cyril Ramaphosa, and leaders of newly inducted members such as Egypt, Ethiopia, Iran, UAE, and Indonesia. Ambassador Ina Krisnamurthi of Indonesia called for systemic reform, saying, 'Our international order, the rules-based system, is crashing into the limits of its founding vision.' She said BRICS must evolve from 'just dialogue to delivery,' focusing on climate finance, humanitarian relief, and data equity. 'Right now, the Global South represents 85 per cent of the world's population and 39 per cent of global GDP,' Krisnamurthi noted. 'Yet multilateral institutions do not reflect this reality.' Citing a surge in the middle class across India, China and ASEAN, she said: 'In 2000, only 150 million enjoyed middle-class living standards. Today, that number is 1.5 billion — double the total population of Western countries.' Egyptian envoy Kamel Galal said Cairo had always seen itself as a natural part of the bloc. 'We are keen that the group should focus on areas of cooperation that enjoy consensus, rather than divisive issues,' he said, stressing a development-first agenda for Africa and the Middle East. Touching on global flashpoints like Gaza, Syria, Lebanon and Sudan, Galal called for reforming global institutions to better reflect 'the evolving dynamics and rising role of developing countries.' Quoting the Egyptian Book of the Dead, he added, 'What I hate is ignorance, smallness of imagination, the eye that sees no further than its own idol. All things are possible. Who you are is limited by who you think you are.' Replacing the oft-cited 'conflict, crisis and challenge' narrative, Galal proposed a new vision for BRICS: 'collaboration, complementarity, consensus and cohesion.' The panel concluded with a Q&A session that focused on the institutional future of BRICS, prospects of a unified currency, and the bloc's ambitions under the UN Sustainable Development Goals framework. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
